Toomre Capital Markets LLC

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Eliot Spitzer: The "Ethics Champion" and Client 9 of Prostitution Ring!!!

[UPDATE: Fox News is reporting that Eliot "Spitzer has been indicted in the Southern District of New York in connection to a high-profile prostitution ring and is expected to resign, sources told FOX News." Supposedly Governor Spitzer is scheduled to resign at 7 PM on March 10th before the New York State Senate.]

On Monday March 10th 2008, CNBC and The New York Times are reporting that New York Governor Eliot Spitzer has told key aides that he has been caught on a federal wiretap arranging to meet with a high-priced prostitute at a Washington hotel last month. He is the supposed "Client 9" of a prostitution ring called Emperors Club VIP that was busted last week (a copy of federal complaint can be found here). Close reading of the Emperors Club indictment suggests that "fraud" Spitzer was a repeat customer, who had both a balance with the prostitution ring in the past and was willing to make a deposit so that he could avail himself of the prostitute's services. He also apparently liked more "kinky" sexual activities that "you might not think were safe." [Reference to quote on page 38 of the sealed Emperors Club indictment.]

As more details of this incident emerge, Toomre Capital Markets LLC ("TCM") cannot think of a more hypocritical individual – and wonders why his resignation was not immediately submitted.

As many involved in the Capital Markets may recall, Governor Spitzer, while serving as New York Attorney General in the early 2000's, was a staunch crusader for "ethics." Among his "notable" achievements were the massive settlement with Wall Street about the separation of investment banking and research; his "moral purity" pursuit of those involved in late hours trading of mutual funds (based upon 4 PM closing NAV calues); his dogmatic pursuit of former NYSE chairman Dick Grasso; and his public persecution (without any formal indictment) of former AIG chairman Hank Greenberg. This was a persecutor who held himself as being different and a true "ethics champions". With each of his targets, there were grand pronouncements by the Spitzer team of how Attorney General Spitzer was cleaning up the wrong-doing of others and how important ethics were.

If these reports are indeed true (as they increasingly appear to be), what are we to think of anything that this "fraud" of public official has said in the past? The great amount of buzz about this news story of Spitzer and prostitution flying around Wall Street is incredibly telling of how disliked Governor Spitzer truly is. Need one wonder why with the "holier than thou" and his heavy-handed approach then Attorney General Spitzer used with each of his targets? Payback truly can be a bitch, especially when one goes so far out of one's way to burn bridges and embarrass people to further one's own agenda.

The website Smoking Gun posted information last week entitled Online Hooker Ring Busted. According to reports in The New York Sun this morning, "Prosecutors specializing in government corruption cases are leading the investigation into what authorities say was a prostitution service that charged up to $5,500 an hour — suggesting that the U.S. attorney's office in Manhattan may have evidence that a public official hired a prostitute." [Subsequent news reports confirm that Governor Spitzer has been caught on electronic recordings as one of the "johns" of this particular prostitution ring. May he forever after be known as "Client 9"!!!]